US stock markets converge on telecoms

US equities indices are poised for a revamp to keep up with the evolving nature of communications, reports the Financial Times. “S&P Dow Jones Indices and MSCI said that they planned to ditch the telecommunications sector – which has been whittled down to just AT&T, Verizon Communications and CenturyLink after a wave of consolidation – and combine its current constituents with media and entertainment companies to create a new communications services sector. The new sector will encompass companies “that facilitate communications and offer related content and information through various mediums”, according to the announcement from the index operators, which operate trading platforms including the benchmark S&P 500 and the Dow Jones Industrial Average. “Critics of the current set-up had argued that the small number of telecoms companies had made the sector vulnerable to large jumps in any one constituent. The Global Industry Classification Standard, or GICS, is a system used by indexers and investors to drive asset allocation, and can help steer investments worth trillions of dollars worldwide. The new communications services sector will comprise two sub-sectors. The first, telecommunications services, will include companies that provide telecoms, internet and wireless services. The media group will decamp from its current home in the consumer discretionary sector to make up the new media and entertainment sub-sector, which will consist of advertisers, broadcasters, cable and satellite providers, publishers, movie and entertainment companies and interactive home entertainment services. Read more